Archives for January 2010

January 2010 - Page 6 of 8 - Money Morning - Only the News You Can Profit From

This Investment Portfolio is on Fire ...

Dear Money Morning reader:

We get asked a lot about the track record of The Money Map Report, our monthly advisory service in which Keith Fitz-Gerald, Martin Hutchinson and the rest of the Money Morning team ferrets out investment opportunities based on some of the most powerful global trends at work today.

Let me just say this: This portfolio is on fire.

Of the 24 stocks and exchange-traded funds (ETFs) in the portfolio, 21 are winners. Indeed, only three of the holdings are under water – two of them by such nominal amounts as 1.77% and 1.24%.

But the gains are eye-popping.

I obviously can't name the stocks or ETFs in the Money Map portfolio, but the current list of winners includes gains of 122.2%, 91.5%, 61.9%, 53.1%, 46.2%, 37.6%, 35.1%, 32.1%, 31.6%, 28.8% and 28.6%.

The Money Map Report is able to notch such gains because team members identify the most-powerful and profitable trends long before Wall Street even understands what's happening.

In fact, here's an example from yesterday (Monday).

Have you been reading about steel prices? The steel market was hit hard by downturns in the auto and construction markets. But prices have been on a tear. Scrap steel has zoomed 25% since November. Just yesterday, The Wall Street Journal reported that China's growing appetite for steel alone should be enough to cause steel prices to soar.

Now Wall Street is calling for steel prices of all types to continue their advance well into the spring. In fact, ABCNews.com yesterday reported that Wall Street equity strategists are now telling investors to buy the leading global steel stocks.

That's a nice call. But it's a little late.

Back in April – that's nine months ago – Money Map's Hutchinson told subscribers to buy shares of Korean steel giant Posco Inc. (NYSE ADR: PKX).  At the time, Hutchinson said three catalysts would send the shares higher:

  • A turnaround in Korea.
  • Rising steel demand from China.
  • And an overall increase in global steel prices.

Hutchinson was three for three. Since he made that call, shares of the world's No. 4 steelmaker have soared more than 91% – with Wall Street now telling readers to get into the game.

In other words, while Wall Street was waiting for a clear signal as to which way steel prices (and steel stocks) were heading, Money Map Report readers were almost doubling their money on Posco.

And that's just one example.

In the newest issue, for instance, The Money Map Report will look at such opportunities as:

  • A cash-rich company that's in a great position to buy back shares – and that may become a takeover target.
  • A firm that's perfectly positioned to capitalize on the uptick in natural-gas prices, and that may be snapped up as part of the anticipated consolidation in the energy sector.
  • And a firm that's poised to benefit from a rising tide of IT investments.

The Money Map team scours the globe in search of the best investment opportunities. The fact that it usually does so well ahead of Wall Street is the main reason for the returns we listed above.

In the aftermath of the worst financial crisis of our lifetime, it's understandable that most investors want to avoid Wall Street and paddle their own canoe.

That task becomes a lot easier, though, when you have the right kind of map to guide you.

That's what we work to provide.

Good investing …

William Patalon III
Executive Editor
Money Morning/The Money Map Report

[Editor's Note: For more insight on global-investing profits, hot portfolios, and the best investment opportunities around the world, check out The Money Map Report.]

News and Related Story Links:

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Number of the Day: With 13.6 Million Vehicles Sold Last Year, China Has Passed the U.S. as the World's Largest Auto Market

China dethroned the United States as the world's largest auto market in 2009 with 13.6 million vehicles sold. It's the first time since Henry Ford's assembly line created a mass market for cars and trucks last century that a country other than the United States led the world in auto sales.

China sold more cars than the United States every month last year, except for August when the popular "Cash-for-Clunkers" program bolstered U.S. sales. China's auto sales, which also were boosted by government incentives, nearly doubled in December, rising 92% from a year earlier to 1.41 million vehicles, the China Association of Automobile Manufacturers said yesterday (Monday).

Roughly 10.4 million light vehicles were sold in the United States in 2009 – the lowest total since 1982 and a 21% decline from 2008. That number doesn't include the sale of heavy commercial vehicles, whereas China's total does. However, just 500,000 heavy commercial vehicles were sold the United States last year, CSM Worldwide analyst Yale Zhang told The Wall Street Journal. That would still leave U.S. sales short of China's mark.

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How to Profit From the "Road Map to Recovery," Regardless of What Lies Ahead

Getting both sides of a bear market and recovery right is the biggest test that investors face because it requires doing an about-face on a winning strategy.

The ideal investor would have sold in October 2007 when stocks were making new all-time highs, then stayed out of all subsequent rallies during the worst bear market in seven decades, and then bought back into the market at its once-unimaginable low after not just the wheels of the economy had fallen off, but seemingly the engine, doors and steering wheel as well.

Also, the ideal investor didn't just need to recognize those inflection points, but make the most of his observation by exiting in full in October 2007 and re-entering with guns blazing in March 2009. That is even harder. The most common scenario would be to exit partially and enter partially.

Recognizing that only the most prescient investors will get these inflection points exactly right, I have focused my long-term research since the 2000 bear market on paying as much attention as possible to the message of the ticker tape rather than economics or fundamentals when it comes to these calls.

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Buy, Sell or Hold: Google Inc. Sure to Surprise After Adapting to New Technology

When Google Inc. (Nasdaq: GOOG) reports its fourth-quarter and full-year earnings on Jan. 21, the Internet search giant is poised to once again surprise Wall Street by beating expectations and reporting an increase in market share.

It is awe-inspiring to think about what Google is and what it has accomplished in such a short period of time. Just this week, German Justice Minister Sabine Leutheusser-Schnarrenberger told the weekly magazine Der Spiegel that Google has already become a "giant monopoly" like Microsoft Corp. (Nasdaq: MSFT).

Google invented the very best search engine and now it is reaping the benefits.

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The Seven Investment Risks to Avoid in 2010

Spurred by its best annual performance since 2003, U.S. stocks stampeded into the New Year, with the Dow Jones Industrial Average, the Nasdaq Composite Index and Standard & Poor's 500 Index posting gains of 1.49%, 1.73% and 1.60%, respectively. And while that's certainly a respectable beginning, investors shouldn't assume it signals that a bull market run its course for the full year.

Indeed, while Money Morning's outlook for 2010 is generally positive, there are at least seven major risks that could rein in the charging bull – or even release an angry bear into the trading arena. The top risks consist of:

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Latest Unemployment Numbers Prove There's No Easy Way Out of a "Jobless Recovery"

The unemployment numbers reported by the Labor Department Friday are proof that despite recent optimism about the job market, the economy is still trudging through a jobless recovery. And it doesn't look like the labor picture will improve anytime soon, either. 

Employers unexpectedly shed 85,000 jobs in December, displaying a lack of confidence in the economic recovery and leaving the "official" unemployment rate at 10%. 

However, the real rate of unemployment — which includes part- time workers who want full-time jobs and people who want work but have simply stopped looking — rose to 17.3% from 17.2%.

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Geithner's Fed Pressured AIG to Keep Quiet on "Back Door Bailouts"

The Federal Reserve Bank of New York, while headed by current Treasury Secretary Timothy Geithner, pressured American International Group Inc. (NYSE: AIG) to withhold information about payments it made to banks during the peak of the financial crisis, according to a report by Bloomberg News yesterday (Thursday).

A series of emails between the Federal bank and AIG lawyers show that the insurer was told to delete details from public disclosures about payments it made on credit default swaps to such banks as Goldman Sachs Group Inc. (NYSE: GS) and Deutsche Bank AG (NYSE: DB), which were settled for 100 cents on the dollar.

The swap payments, which totaled $62 billion and have been characterized as "back door bailouts" by some lawmakers, are at the center of allegations that Geithner failed to negotiate a better deal for taxpayers.

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China is Doing Exactly What the United States Should be Doing - Looking Ahead

After boosting its economy with an $885 billion (2 trillion yuan) stimulus package, China is doing exactly what the United States should be doing – turning its attention toward inflation and excess lending.

The People's Bank of China (BOC) yesterday (Thursday) raised the interest rate on its three-month bills for the first time since Aug. 13. The central bank sold $8.8 billion (60 billion yuan) of three-month bills at a yield of 1.3684%. That's up from 1.3280% last week.

Also, the BOC this week drained a net $20.1 billion (137 billion yuan) from the money market through its open-market operations – its largest weekly fund withdrawal in nearly three months.

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Investment News Briefs

Former McKinsey Director Pleads Guilty in Galleon Scandal; Unemployment Claims Drop; EPA Tightens Ozone Standards; Cold Snap Threatens Natural Gas Production; State Tax Collections Plummet; Oil Slides From a 15-month High

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Ignore the Crowd ... It's Time to Invest in Commercial Real Estate

Of all the independent institutional research that I receive, some of my favorite comes from Justin Mamis, a veteran of all the financial wars we've seen over the past five decades.

Although he's steadfastly bearish, no matter the climate – like those codgers you see wearing heavy coats on sunny days in Florida – the Canadian analyst has lasted so long because he's quick with colorful phrases, and his research is amusing and insightful.

Just last week, Mamis recounted a conversation he had enjoyed years ago at the table of his new boss, the legendary analyst/historian/portfolio manager Don Coxe: "At dinner, [Coxe] would lean back in his chair in that professorial manner of his and "remind" the guests that the Sanhedrin, the Hebrew Court of Law, had a rule that if every member voted the same way, the decision went the other way," Mamis wrote. "Unanimity had to be misguided."

That story got me thinking: What is one investment theme that the public and/or pros could agree on today?

For more insight on the investment move to make now, read on ...